Long Term Care Update

When underwriting is complete on all Open Season applicants (by early spring), the Program is expected to be the largest employer-sponsored long term care insurance program in the country, with more than 215,000 enrollees.

    In remarks at the 16th Private Long Term Care Insurance Conference, Frank Titus, Assistant Director for Long Term Care Insurance at OPM, said, "The Federal Long Term Care Insurance Program's Open Season was extremely successful both in terms of educational outreach and participation. We've seen strong support for the Program demonstrated in Congress, in Federal agencies, and ultimately in the number of people who applied. OPM is proud of the first-year success of the Program-one of the most flexible, inclusive, and affordable long term care insurance programs ever developed."

  The end of the Open Season also marked the close of the most comprehensive education and enrollment campaign ever conducted for long term care insurance.  According to Titus, the 2002 marketing campaign for the Federal Long Term Care  Insurance Program was a multi-phase, multi-media program designed to help individuals access information, understand their risks, and consider their options. "Our education campaign, which began in February 2002 and continued through the end of the year, unfolded the way the framers of the Long-Term Care Security Act of 2000 envisioned. We touched eight million people through meetings, mailings, and the web site, more than one million of whom requested information kits.  Of those who requested kits, more than 25% applied for coverage. Now more people than ever before know about and understand the value of planning for long term care. The huge number of applicants reflects not only the success of the campaign, but also the recognition that the Federal Program offers excellent value, with its flexible informal care benefits, generous provision of Care Coordination and Information Counseling services, third-party claims appeal process, international benefits, and other features
not commonly found in long term care insurance plans."

   Paul Forte, Chief Executive Officer of Long Term Care Partners, LLC, a 15-year veteran of the long term care insurance industry, noted, "The Federal Long Term Care Insurance Program is a landmark in the industry. Its success demonstrates that the public and private sectors, working together, can help individuals take responsibility for their long term care needs without relying on taxpayers and already strained government programs such as Medicaid. I believe that the Federal Program will become the new standard for consumer excellence in the industry and the benchmark against which all future long term care insurance coverage will be measured."

    To date, enrollees in the Federal Long Term Care Insurance Program are nearly evenly split between two groups: active employees, members of the uniformed services, and their spouses; and annuitants, their spouses, and other qualified relatives. Approved applicants are 54% female and 46% male 

The average age of an active civilian enrollee in the Program is 51; the average age of an active uniformed services enrollee in the Program is 45. The average age of a civilian or Postal annuitant in the Program is 65; the average age of a retired uniformed services enrollee in the Program is 63.

    Nearly 70% of the group opted for one of four prepackaged plans. The most popular plan design was the Comprehensive 100 Plan with the automatic compound inflation option, offering a $100 daily benefit amount, a 3-year benefit period, and a 90-day waiting period. Overall, nearly 70% of the group chose the automatic compound inflation option, one of the highest take-up rates in the employer market.  "We take particular pride," said OPM's Titus," in our success in educating applicants about the importance of automatic compound inflation protection."

   The annualized premium for the Federal Long Term Care Insurance Program is projected to be more than $250 million, significantly higher than most programs on a per-enrollee basis. This is largely attributable to three factors: no upper age limitation, a larger proportion of older enrollees (e.g., Federal retirees) than most employer group programs, and success in promoting the selection of automatic inflation protection.

About the Federal Long Term Care Insurance Program

    The Federal Long Term Care Insurance Program, sponsored by the U.S. Office of Personnel Management and administered by Long Term Care Partners, LLC, is a voluntary long term care insurance program offered to Federal employees and annuitants (including the U.S. Postal Service), active and retired members of the uniformed services, their spouses, as well as other qualified relatives.

It was created by the Long-Term Care Security Act of 2000. Open Season for the Federal Long Term Care Insurance Program ended on December 31, 2002. The Program continues to be available to eligible applicants with full underwriting.

    A web site for the Federal Long Term Care Insurance Program, http://www.ltcfeds.com, offers online applications, an interactive calculator to provide customized price quotes based on age and choice of benefits, and educational resources about long term care and long term care insurance. Information may also be obtained by calling 1-800-LTC-FEDS     (1-800-582-3337), TTY: 1-800-843-3557. OPM also has a web site, found at http://www.opm.gov/insure/ltc.

    About Long Term Care Partners

  Long Term Care Partners, LLC is a joint partnership formed by John Hancock Life Insurance Company (John Hancock) and Metropolitan Life Insurance Company (MetLife) to administer the Federal Long Term Care Insurance Program. It is located in Portsmouth, New Hampshire.

    About John Hancock --  John Hancock Financial Services (NYSE: JHF) and its affiliated companies, which include John Hancock Life Insurance Company, together provide a broad array of insurance and investment products and services to retail and
institutional customers. As of December 31, 2002, John Hancock and its subsidiaries had total assets under management of $127.6 billion.

  About MetLife  -- MetLife, a subsidiary of MetLife, Inc. (NYSE: MET), is a leading provider of insurance and other financial services to individual and institutional
customers. The MetLife companies serve approximately 12 million individuals in the U.S. and companies and institutions with 33 million employees and members. 

MetLife also has international insurance operations in 12 countries. As of December 31, 2002, MetLife Inc. had total assets under management of $299.2 billion. For more information about MetLife, please visit the company's web site at http://www.metlife.com.  

More News

UnumProvident is making it easier for customers to choose the appropriate type of long term care (LTC) coverage by delivering a new insurance solution to the marketplace that offers a reimbursement or an indemnity plan design. 

Customers may choose between a plan design that reimburses for costs already incurred and a plan design that pays the full daily benefit, regardless of costs incurred. This level of choice allows customers to adapt their LTC coverage to their specific needs and budgets. 

With the addition of a reimbursement option to UnumProvident's traditional indemnity-based offerings, UnumProvident differentiates itself with a broadened LTC portfolio that reaches more customers. 

"We recognize the increased demand for LTC as an employee benefit and have designed our portfolio to fit easily into the worksite sales scenario," said Guy Bertsch, vice president, Core Market Development. 

He adds:  "Our portfolio refinements let us respond to the changing LTC marketplace.  Both the indemnity and reimbursement plans offer comprehensive coverage and optional features so customers may build or change their policy over time in a convenient manner at the worksite." 

Both the reimbursement and indemnity options offer additional provisions, at no extra cost, including bed reservation, respite care, waiver of premium and guaranteed renewable benefits. 

UnumProvident is also introducing new features that meet the needs of both employers and individual policyholders. 

For example:  An Accelerated Payment option allows customers to pay for their policy within a certain time period instead of over their lifetime -- options are to age 65, 10 years, five years or a single year. 

A new International Benefit covers care or services anywhere in the world, allowing policyholders to relocate without impacting their ability to receive a benefit. The company has launched a comprehensive communication campaign to brokers and LTC customers to inform them of the new portfolio refinements. 

"We are very committed to the LTC market and its growth potential," said Joe Foley, senior vice president, Product and Market Development. "That's why we are responding to the market environment with a broadened portfolio that will help ensure long-term stability for our customers and will support our continued growth as a leading LTC provider." 

Consumer Education UnumProvident's commitment to providing product choice and purchase flexibility supports the tremendous interest in LTC insurance that exists today. 

Like other carriers, UnumProvident emphasizes consumer education to increase awareness of the important benefit. 

Central to this education is the fact that as America ages, the need for long term care grows. More than 12 million people in the United States currently need long term care.

1. Without LTC insurance, prolonged expenses can add up quickly: *  Today, the average nursing home stay costs close to $56,000 a year.
2. By 2030, the national average cost is estimated to be $190,600 a year.
3. Bringing an aide into the home just three times a week to help with dressing, bathing, preparing meals, and similar household chores can easily cost $1,000 a month, or $12,000 a year.
4. The costs of long-term care services will more than quadruple by 2030.
5. "The reality is that individuals and their families usually bear the weight of this financial burden, because health insurance and government funding don't adequately cover expenses related to long term care," said Bertsch. The good news: Employers are increasingly aware that the need for LTC extends well beyond the elderly, affecting individuals at any age. Growth in employer-based plans is increasing at a dramatic rate of 32 percent per year. 
6. UnumProvident's range of product options -- both employer- and employee- funded -- answer the growing need for LTC as an employee benefit. "Building on our block of traditional individual business, our expanded portfolio and the ease of our worksite sale will allow us to meet the full range of customer needs," said Bertsch. 

The subsidiaries of UnumProvident Corporation offer a comprehensive, integrated portfolio of products and services backed by industry-leading return-to-work resources and disability expertise.

• UnumProvident is the leader in income protection, providing insurance and services to individuals, both directly and through their employers.
• UnumProvident has more than 100 years of experience in creating innovative solutions that protect the rewards of work: paychecks, assets and lifestyles.
• UnumProvident was named one of Fortune's top ten most admired insurance companies
• UnumProvident Corporation has operations in the United States, Canada, the U.K., Japan, and elsewhere around the world. Company headquarters is in Chattanooga, Tenn., with significant U.S. operations in Portland, Maine; Worcester, Mass.; and Glendale, Calif. For more information, visit our Web site: http://www.unumprovident.com .
• UnumProvident represents multiple insuring subsidiaries of UnumProvident Corporation, including the #1 individual and group income protection carriers in the U.S., according to the JHA U.S. 2001 Group and Individual Disability Market Surveys, 2002. 

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